Buy a House Now or Wait Calculator

Related Calculators

Table of contents

• How to use
• Common mistakes
• Definitions
• Methodology
• Limitations & assumptions
• Sources

Principal and interest: The loan payment part that pays down the mortgage balance and pays the lender interest. It does not include taxes, insurance, maintenance, or HOA fees.

Loan term: The scheduled length of the mortgage in years, such as 30, 20, or 15 years.

Future home value: The estimated home price after the wait period, based on Home price today ($) and Home price change by then (%).

Owner carrying costs: Ongoing costs of owning during the wait period, including property tax, home insurance, maintenance, and HOA fees.

Buyer closing costs: One-time costs paid to complete the home purchase, separate from the down payment.

Selling cost: An optional estimated cost if you had to sell the home at the comparison date.

Saved cash available: Down payment saved now, estimated cash growth, and extra monthly saving after the wait period.

Break-even future rate: The future mortgage rate that would make the later principal-and-interest payment match today's principal-and-interest payment.

Mistake: Entering Mortgage rate if you buy now (%) as a monthly rate instead of an annual rate.
Fix: Use the yearly fixed mortgage rate, such as 6.5 for 6.5% per year.

Mistake: Putting a yearly rent total in Rent while waiting ($ per month).
Fix: Enter one month's rent, such as 2,200, because the calculator multiplies it by How long you might wait (months).

Mistake: Treating Home price change by then (%) as an annual growth rate.
Fix: Enter the total expected change over the whole wait period, such as 3 for a 3% higher price after the wait.

Mistake: Setting Down payment saved now ($) higher than Home price today ($).
Fix: Lower the down payment or raise the home price so the buy-now loan amount is not negative.

Mistake: Leaving Property tax (% of home price per year), Maintenance (% of home price per year), or Buyer closing costs (% of home price) at defaults when you know local numbers.
Fix: Replace defaults with your own estimate, quote, or local tax rate before trusting Money ahead by buying now.

Mistake: Reading Change in loan payment if you wait as total housing cost.
Fix: Use it only for principal and interest. Taxes, insurance, maintenance, and HOA are counted separately in Cost of buying now during the wait period.

• The calculator compares a numeric buy-now path with a numeric wait path. It does not decide if you are personally ready to buy.
• Mortgage rates, home prices, rent, taxes, insurance, and maintenance can all differ from your estimate. Small rate or price changes can move the answer by thousands of dollars.
• Home price change by then (%) is treated as one total change over the wait period, not an annual growth rate.
• Principal is treated as equity, not a cost. Interest, rent, owner carrying costs, closing costs, and optional selling costs are treated as unrecoverable costs.
• Future loan amount is floored at $0 if saved cash exceeds the future home value. That prevents an impossible negative mortgage.
• The break-even future rate is searched only from 0% to 25%. If no rate in that range matches today's payment, the calculator shows N/A.
• The model does not include income taxes, mortgage points, PMI, rent deposits, moving costs, appraisal gaps, refinance costs, investment risk, or changes in your income.
• Default property tax, maintenance, and closing cost values are starter assumptions only. Replace them with local estimates when possible.

Core mortgage math

The calculator uses a fixed-rate amortized mortgage model. On a typical fixed-rate loan, the combined principal and interest payment stays the same, but the split between principal and interest changes over time [3].

loan_amount_now = home_price_now - down_payment_now

monthly_rate = annual_rate_percent / 100 / 12

term_months = loan_term_years * 12

payment = loan_amount * monthly_rate / (1 - (1 + monthly_rate)^(-term_months))

If the mortgage rate is 0%, the payment is calculated as the loan amount divided by term months.

payment = loan_amount / term_months

Buy-now path

The buy-now path estimates what happens between today and the end of the wait period if you buy now. The future home value uses the entered total price change.

future_home_value = home_price_now * (1 + future_price_change_percent / 100)

The remaining balance after the wait period is based on the scheduled mortgage payment. If the wait period is longer than the mortgage term, the remaining balance is capped at $0.

balance = loan_amount * (1 + monthly_rate)^wait_months - payment * (((1 + monthly_rate)^wait_months - 1) / monthly_rate)

If the mortgage rate is 0%, the balance is calculated by subtracting scheduled principal payments.

balance = loan_amount - payment * wait_months

Interest paid is total payments made minus principal paid. Owner carrying costs include property tax, home insurance, maintenance, and HOA fees. Buyer closing costs are a one-time purchase cost, and mortgage cost categories are commonly shown on a loan estimate [1].

interest_paid = payment * months_paid - (loan_amount_now - remaining_balance)

owner_carrying_costs = property_tax + home_insurance + maintenance + HOA

buy_now_net_cost = interest_paid + owner_carrying_costs + buyer_closing_costs + selling_costs - (future_home_value - home_price_now)

Wait path

The wait path counts rent during the wait and subtracts estimated growth on saved cash. Extra saving is not treated as a cost because it remains your money.

monthly_cash_return = cash_return_percent / 100 / 12

cash_available_after_wait = down_payment_now * (1 + monthly_cash_return)^wait_months + extra_saving_monthly * (((1 + monthly_cash_return)^wait_months - 1) / monthly_cash_return)

If the cash return is 0%, saved cash is calculated without compounding.

cash_available_after_wait = down_payment_now + extra_saving_monthly * wait_months

investment_gain_on_saved_cash = cash_available_after_wait - down_payment_now - extra_saving_monthly * wait_months

wait_net_cost = rent_monthly * wait_months - investment_gain_on_saved_cash

The later loan amount uses saved cash against the future home value and cannot go below $0.

future_loan_amount = max(0, future_home_value - cash_available_after_wait)

Main comparison

Money ahead by buying now is a signed result. Positive means buying now has the lower modeled cost. Negative means waiting has the lower modeled cost.

now_vs_wait_advantage = wait_net_cost - buy_now_net_cost

Change in loan payment if you wait compares principal and interest only.

monthly_pi_change = future_monthly_pi - current_monthly_pi

Future rate needed to match today's payment is found by bisection from 0% to 25%. Mortgage rates can change over time, so this is a sensitivity check, not a forecast [2].

monthly_payment(future_loan_amount, break_even_rate, term_months) = current_monthly_pi

Worked mini-example

Using the default example, Home price today ($) is $400,000, Down payment saved now ($) is $80,000, Mortgage rate if you buy now (%) is 6.5%, How long you might wait (months) is 12, Home price change by then (%) is 3%, Mortgage rate if you wait (%) is 6.0%, and Rent while waiting ($ per month) is $2,200. With the default advanced assumptions, Payment if you buy now is about $2,022.62 per month and Payment if you wait is about $1,975.92 per month. Cost of buying now during the wait period is about $30,894.69, Cost of waiting is about $23,966.72, and Money ahead by buying now is about -$6,927.97. The negative sign means the wait path is ahead in that scenario.